Duties, royalties and taxes

Duties, royalties and taxes payable by private parties

What duties, royalties and taxes are payable by private parties carrying on mining activities? Are these revenue-based or profit-based?

Private parties conducting mining activities are required to pay an annual fee of 2 per mille of the average value of the minerals mined. The revenue is split between the landowners and the state, with landowners receiving 1.5 per mille and the state 0.5 per mille.

Normal corporate income tax, currently set at 22 per cent, applies to mining companies but there are no additional taxes for mining in particular.

For an exploration permit, certain fees have to be paid to the Mining Inspectorate by the applicant. An application fee of 500 kronor shall be paid to the Mining Inspectorate when handing in the application for every new area consisting of 2,000 hectares. If permission is granted, another 20 kronor for each hectare has to be paid for the first three-year period of the permit. If an extension of the exploration permit is permitted, an additional fee of 21 kronor per hectare per year is required. Further extension of the permit is possible, but will result in even higher annual fees. All fees are required to be paid in advance for each period of time.

When applying for an exploitation concession, a fee of 80,000 kronor must be paid for each area the application concerns. There is also a fee for the designation of land proceedings.

Tax advantages and incentives

What tax advantages and incentives are available to private parties carrying on mining activities?

The tax advantages and incentives for private parties engaged in mining activities are regulated by the Energy Tax Act (No. 1,776 of 1994). For example, tax relief can be obtained regarding carbon dioxide tax and energy tax for certain vehicles used in the mining activity process.

Tax stablisation

Does any legislation provide for tax stabilisation or are there tax stabilisation agreements in force?

There is no legislation in force regarding tax stabilisation and there are no tax stabilisation agreements. There are special rules regarding the state-owned company LKAB. These rules apply to, for instance, customs regulations.

Carried interest

Is the government entitled to a carried interest, or a free carried interest in mining projects?

During the course of the exploitation, the holder of the concession must pay an annual mineral reimbursement according to the Minerals Act (see question 19). The holder of the concession is obliged to provide the information necessary to determine the scope of the reimbursement.

Apart from this mineral reimbursement, the government is not entitled to any type of carried interest in mining projects.

Transfer taxes and capital gains

Are there any transfer taxes or capital gains imposed regarding the transfer of licences?

There are no special tax regulations for mining. General corporate tax law applies.

Distinction between domestic parties and foreign parties

Is there any distinction between the duties, royalties and taxes payable by domestic parties and those payable by foreign parties?

Foreign parties pay the same duties and royalties as domestic parties. As a main rule, they also pay the same taxes.